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payday loans

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payday loans

Ohio Senate Passes Strict Lending Legislation, Prepares To Punch Payday Lenders In The Face

The ass-kicking, face-punching anti-payday lending legislation that we've been keeping an eye on in Ohio has passed the Senate. The Columbus Dispatch says:
House Bill 545 would slash the current interest rates charged by payday lenders to 28 percent, down from 391 percent, prohibit loans terms of less than 31 days, and limit borrowers to four loans per year. It would ban Internet payday lending, and it also attempts to encourage lenders to get into the small-loan business.
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4:49 PM on Wed May 14 2008
By Meg Marco
3,818 views, 75 comments

With the threat of stopping their charitable contributions, Rent-a-Center strong-armed an Ohio food-bank into dropping out of an anti-payday-loan advocacy group. The interest rates Rent-a-Center charges can come to as much as 782% APR. [WSJ]

9 comments

Research shows that, despite charging high interest rates, payday lenders don't make much money than typical businesses. [Credit Slips]

11 comments

how to

Break The PayDay Loan Death Cycle

Are you trapped in a payday loan death cycle, or have a friend or family member who is? See, the problem with a payday loan is that some people aren't able to pay the first one off (if you don't have money in the first place, you're not going to be any better off two weeks later!), and then have to take out more and more loans to cover each loan they couldn't pay off. Not only is there high interest, there's fees. A former PayDay loan lender on personalbudgettraining.com shares his advice for breaking out of the debt trap.

If you can't get out of this right now, start by advancing $50 less per pay period. Take the difference of what you were paying us in fees and start paying it into an emergency fund. Grab a job delivering pizzas, babysitting, whatever, and pay it into an emergency fund. Borrow less and less from us. Use the EF for actual emergencies. Once you are out of this, don't get back into it.
Earn more, borrow less, and pay off more.

(Photo: ninjapoodles)

5:27 PM on Wed Mar 12 2008
By Ben Popken
2,141 views, 15 comments

Latest by jeremy marr: I used to work at one of these stores back in the day. It didn't last long - I figured out how bad it was pretty quickly. They prey on the uneducated who are in an emergency mostly. I've seen a more »

usury

New Hampshire Gives Payday Lenders The Boot

New Hampshire will become the latest state to keep payday lenders from gouging their patrons. A measure passed by the legislature will cap interest rates on payday loans at 36%, a drastic change for an industry used to bludgeoning underbanked consumers with interest rates exceeding 500%. Payday borrowers spend an average of $793 trying to repay a $325 loan. Let's see how the economic leeches spin this as a loss for consumers. More »

9:54 AM on Sat Feb 16 2008
By Carey
4,072 views, 74 comments

"If it sounds like legal loan-sharking, it's not. 'Loan sharks are actually cheaper," leader of the Ohio Coalition for Responsible Lending, talking about payday loans. [CNN Money]

1 comment

Soldier robs two banks because he was $30,000 in debt to payday loan agencies. [Seattle Post-Intelligencer]

32 comments

funny

Join The Predatory Lending Association!


PredatoryLendingAssociation.com is a clever parody site mocking payday loans and the efforts of groups like the The Community Financial Services Association of America (CFSA), a lobbying group that tries to make the loan sharks look like respectable financial institutions.

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2:51 PM on Mon Nov 26 2007
By Ben Popken
1,959 views, 15 comments

payday loans

Usury Is Good For You

Usury is good for you. That's the lesson from an article in today's WSJ using empirical evidence to defend the practice of charging 200% interest rates.

A randomly selected pool of Latin America borrowers who were just below the normal level of credit worthiness were approved for a 200% 4-month installment loan. A control group was denied based on normal policies. Tracked over the next two years, the group with the high-interest loan made more money, went less hungry, had better credit scores, and were happier than their control group. They also had higher default rates.

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2:59 PM on Thu Nov 1 2007
By Ben Popken
3,010 views, 26 comments

usury

Payday Loans Die In DC

In a victory for consumers, Washington D.C. effectively outlawed payday lending today with the passage of the Payday Loan Consumer Protection Act capping lending interest rates at 24%. More »

7:10 PM on Thu Sep 20 2007
By Ben Popken
2,857 views, 26 comments

"My company was deliberately targeting minority people for a continuous loan process that they would never, ever get out of. " - Bill Harrod, Former Payday Loan Manager. [NBC4]

10 comments

debt

Non-Profit Payday Loans: Loansharks With Shorter Teeth?

"I have almost $100 in savings," said Ms. Truckey, who earns $9.50 an hour as a supermarket meat clerk. "I'm in a comfortable position for the first time in many years."

That's a lady who is finally digging herself out of a payday loan hole with the help of a "non-profit" payday loan. At one point, Truckey was paying $600 a month in finance charges alone. Now she has a new loan through GoodMoney, operated by local credit union. The new loan's APR is only 252%, about half what she was paying before.

That's still a pretty crappy number, and it begs the question, does it really cost that much to lend money? 12 states disagree and have usury laws that prohibit payday lending. There's also an important book would-be payday debtors should read, called, "Don't Buy Stuff You Can't Afford."

Nonprofit Payday Loans? Yes, to Mixed Reviews [NYT]

6:54 PM on Tue Aug 28 2007
By Ben Popken
1,699 views, 26 comments

Payday lenders in Oregon are closing shop in the wake of new regulations that cap the maximum interest of any consumer loan at 36%.

15 comments

payday lending

FDIC Launches Program Encouraging Banks To Offer Small Dollar Loans

The FDIC has announced a program designed to study and encourage small dollar lending programs designed to compete with payday lenders. Under the program banks would offer "loan amounts of up to $1,000, mandatory savings components, payment periods that extend beyond a single pay cycle, interest rates below 36 percent, low or no origination fees, no prepayment penalties, prompt loan application processing, and access to financial education to help with asset building." More »

11:56 AM on Fri Jun 29 2007
By Meg Marco
1,027 views, 10 comments

loansharks

Payday Lenders Funded By Bank Of America, Chase, WellsFargo, U.S. Bancorp, Wachovia

Seven big payday loan chains are extensively bankrolled by brand name banks. Bank Of America, Chase, WellsFargo, U.S. Bancorp, and Wachovia all extend tens to hundreds of million dollars in lines of credit to these predatory lenders who charge several hundred percent interest on cash advances, often made to the poor and uneducated. More »

1:19 PM on Wed Jun 20 2007
By Ben Popken
2,560 views, 42 comments

fringe economy

Maxed Out's Bombshells: 1. Wells Fargo Funds Payday Loan Chains 2. Celebrities Get VIP Credit Report Treatment

While we chided Maxed Out for not discussing consumer self-empowerment, the movie did make two very interesting claims: More »

12:16 PM on Wed Jun 20 2007
By Ben Popken
1,626 views, 16 comments

predatory lending

Utilites And Payday Lending: Why Does AT&T Have 206 Payday Lenders Collecting Bill Payments?

One in four utilities bills is paid in person, and often the transaction takes place within a payday lending establishment, according to a new report by the National Consumer Law Center. The report finds that there are over 650 licensed payday lenders serving as bill paying facilities for 21 public utilities companies, including 206 working for AT&T alone. More »

3:59 PM on Wed Jun 6 2007
By Meg Marco
1,777 views, 17 comments

videos

Confessions Of A Former Payday Loan Center Manager

Here's a video confession from the former manager of a Virginia payday loan center. More »
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